my 3 year experience in rental

Discussion in 'Christmas Trees & Seasonal' started by David Gretzmier, Nov 14, 2012.

  1. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,646

    I think most of you know that for the most part we choose to sell and not rent our lights. This really comes from Brite Ideas back in 2001, where they said many folks had done it both ways, but in the end you may build it slower but will retain far more customers if you sell them the product the first year and then just charge to rehang, maintain, takedown and store.

    So while I have for the most part been a seller, with occaisional forays into rental to keep on a budget for some commercial clients, I embarked upon a journey 2 seasons ago that can be found near the end of my sales journey through 2010season.

    To recap briefly, I created a flat rental price for a certain neighborhood, with the idea we would do this on volume. Sounded like a good idea and the over last 2 seasons we built the first 4 into 8 last year, to where we are now. closed 2 earlier this year. but we have had cancellations like crazy along the way. 2 cancelled from year 1 to year 2, and 4 canceled from year 2 to this year 3. It is ridiculous that we are talking a $450 rental deal of c-9's across the front face, usually 100-150 c'9s, and folks in these 250-300k homes apparently cannot budget that.

    While I had heard that 50% cancellation or non-renewal rate was normal in the rental field, I certainly did not believe it. It is abundantly true. and not worth my time. To have spent all the time and money trying to help make this particular neighborhood look more festive and to only have 4 current clients to show for it is reason enough to never offer rental to residential again. At least when folks cancel me after the first year in purchase I feel as though I made a normal profit on the first year. covered my costs of material, covered labor and overhead, and made a profit. rental only works if they do it for 3 years. and most apparently don't. Since their price is the same and they have no ownership in the product, they seem to take no pride in "their lights"

    I know a lot of you guys out there rent, and I am sure it is nice to take the same stuff and keep re-using it on different jobs, but I prefer to custom cut a job from fresh and keep them for 5-9 years or more rather than taking used c-9 cord and splicing or cutting. Wreaths on rental make more sense as you can jus put them up where ever.

    after this failed experiment, I am probably always gonna be a purchase guy rather than a rental guy.
  2. PlantscapeSolutions

    PlantscapeSolutions LawnSite Gold Member
    Messages: 3,012

    I know you an incandescent guy and as cheap as that is you've got to be a really tight azz client to not be willing to buy in. From now on rent means run away as fast as you can.
  3. garciajj612

    garciajj612 LawnSite Member
    Messages: 115

    I did 5 houses last year and want to do more this year. Where do you get your lights from?
  4. turf hokie

    turf hokie LawnSite Silver Member
    Messages: 2,753

    I will find time to take the opposite stance later, I have to run and get the guys out...

    I will say this, I think you need to do one or the other. Whichever you are comfortable with is the one that will work for you.

    I HATE selling and will always rent....
  5. We have a number of pro installers that buy from us that do very well with selling their lights. We find that generally if you work more on the residential side, it can be difficult to rent lights out. But we also have a lot of folks that have done well renting. Our own installation division in Florida is rental only. We don't sell a single set of lights on any of our accounts and haven't for over 15 years. Now days with the high grade LED light sets we use, we're getting up to 7 seasons out of a light set and if we sell this to a customer, we're losing a lot of revenue for the next 6 or 7 years. It's not like it was back when everyone was using the incandescent mini lights that only lasted a couple of season. By renting the lights out, we pay for them after year 2 and then we have 5 more years to continue getting revenue from the LED light sets.

    Renting isn't for everyone, but for us it's been great. Once you build a large inventory of good quality rental LEDs, you can offer lights at a price that the guys selling them can't touch. Recoup 50% of your light set cost the first year, 50% the second year and then the next 5 years is 100% profit on the sets themselves.
  6. David Gretzmier

    David Gretzmier LawnSite Gold Member
    Messages: 3,646

    I agree you should do one or the other. I am far better at selling than renting.

    And my repsonse to the longevity question is I have hundreds of linkables from 2001 that we magic box, replace bulbs in and still use. but I would have preferred to replace those at 7 years. I have tons of 50 count mini lights that are the 3000 hour tab lock, with magic boxing we get 5-7 years out of them easy. but With leds, they theoretically should last that long or longer without magic boxing

    I will only concede the lifespan of leds as 7 years when I have an led set or bulb that lasts that long. every LED set or bulb that I have had that is older than 4 years is dead. and those had horrible color and got worse. The newer ones are far better. and I hope they do in fact last 7 years plus. and the cost, ouch.
  7. Birchwood

    Birchwood LawnSite Member
    Messages: 218

    6 years into this and around 80 customers I have only had one rental and they didn't renew. On all of our sales I think we are around a 95% renew rate. My thought is what do you do with the c-7 or c-9 once it is cut to fit the house, are you splicing it all back together. Garland and minis can be reused from job to job.

    Currently we are 6 years into some of our jobs and are starting to see failure in our mini lights. Should I replace the lights or ask the customer to foot the bill to start fresh with new mini lights, my fear is losing customers.
  8. turf hokie

    turf hokie LawnSite Silver Member
    Messages: 2,753

  9. Birchwood

    Birchwood LawnSite Member
    Messages: 218

    That would be right we service for no charge and replace what we cant fix, maybe 1 or 2 strands. I would call it a warranty.

    My thought with the 6 year replacement is if it costs me 20% of the job but I get a happy customer for a possible 6 morre years I come out ahead.
  10. hotrod1965

    hotrod1965 LawnSite Senior Member
    Messages: 587

    Well, if you are all LED, the value is in the bulbs, not the wire.

    Patch together what is easy to patch together, cut new wire for the rest.

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